If you’re building AI, your intellectual property (IP) is your most valuable asset. Whether it’s algorithms, source code, or training data-protecting your IP early is critical. Delaware gives AI startups strong legal tools to secure ownership and investor confidence in 2025.
Tax Code and Legal Reference
- IRC §197 – Amortization of intangibles, including acquired IP
- IRC §162 – Deductions for legal and development costs
- USPTO Guidelines – Federal authority on patents, copyrights, and trademarks
- Delaware General Corporation Law (DGCL) – Supports IP assignment and founder protection
- Common Law – Protects unregistered trade secrets and confidential info
Key IRS and Legal Forms
- IP Assignment Agreements – Transfer founder-created IP to the company
- NDAs (Non-Disclosure Agreements) – Protect ideas shared with contractors or advisors
- Form SS-4 – Required to register trademarks in the company name
- Copyright/Patent Applications – Filed with USPTO
- Delaware Certificate of Incorporation – Should allow IP ownership and stock-based compensation
Example: How IP Was Protected
Example:
Synaptix AI was building an NLP model in 2024. The founder developed the code personally, then transferred all IP to the Delaware C-Corp using an IP assignment agreement. They filed a provisional patent and trademarked the brand name. This clean ownership record helped them close a $1.5M pre-seed round in early 2025 without legal delays.
Step-by-Step: How to Secure Your AI IP
- Transfer IP to the Company
Use an assignment agreement to move code, models, and data to the business entity. - File for Trademark and Domain Name
Register early to protect brand identity. - Use NDAs with Contractors & Collaborators
Prevent leaks and misuse of proprietary work. - Add IP Clauses to Employment & Advisor Contracts
Make sure all inventions stay with the company. - Set Up Clean Cap Table with IP Ownership
Include IP assignment in stock purchase agreements. - Amortize Purchased IP (IRC §197)
Claim tax deductions for acquired patents or licenses. - Maintain Confidentiality
Mark files, use secure storage, and limit access.
Conclusion
In AI, your code is your capital. Delaware’s laws and structures help you own, protect, and monetize your IP while giving investors peace of mind. Don’t delay IP protection-it’s easier and cheaper when done early.
Call to Action
Want to secure your AI IP the right way?
Book a session with Anshul Goyal, CPA, EA, FCA to structure your company and protect your IP from day one.
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Disclaimer
This blog is for informational use only and does not constitute legal or tax advice. For specific IP or tax matters, consult a qualified professional.
Anshul Goyal is a CPA licensed in the U.S., Enrolled Agent with the IRS, and Chartered Accountant (India), with expertise in startup formation, tax law, and IP planning for AI companies.
FAQs – AI IP Protection in Delaware
1. Should I assign my code to my company?
Yes. Founders must transfer IP to the corporation to avoid legal issues.
2. Do I need to trademark my AI startup name?
Yes. It prevents others from copying your brand.
3. What happens if I build the AI model before incorporation?
Use an IP assignment agreement to transfer rights to the company.
4. Can I deduct legal fees for IP?
Yes, under IRC §162, legal and filing costs can be deducted.
5. Do I need a patent for my AI product?
Not always, but a provisional patent can help secure your claim while developing.
About Our CPA
Anshul Goyal, CPA, EA, FCA helps AI founders protect their IP, structure equity, and stay IRS-compliant. With cross-border expertise, he works with U.S. and Indian entrepreneurs building global tech ventures.